December 01, 2006
The Future is NOW, but Measurement is Yesterday
 Advertising Research Foundation (ARF) conducted a survey among the users of audience research services in 2005 and the above said verdict was unanimous and three issues came up across the respondent base:
- Lack of adaptability of current measuring tools
- Sample quality
- Sample size and representativeness
The results of survey clearly demonstrated that in spite of major advances that have been made in media technologies all over the globe the measurement systems (especially Syndicated services) have been plagued by very slow pace of improvements and investments in technology. Naturally monopolies created in many markets have only harmed the interests of all concerned in the communications industry.
Amongst users of Television Research the key concern were:
- Syndicated Service Moves too Slowly to Address Urgent Issues
- Sample Quality and size are inadequate
- Greater Granularity and Flexibility in Reporting and Access are needed
One of the biggest concerns among the advertisers was that of COMMERCIAL RATINGS! One of the concerns aired was:
Figure: Anatomy of Ad Break
| “There is no true measurement on how our commercials perform. We want to measure a true ROI and to date we can only give program performance data as an input to our models, not commercial-specific data!” |
Ratings – The Primary Driver of Television Industry
As per PWC report on Indian Media and Entertainment Industry 2006 the Indian Television Industry was estimated at INR 148 billion and most of the decisions of this industry are taken based on television ratings and it becomes imperative that the decisions are based on robust numbers backed by investments by ratings services in taking intelligent decisions.
Truth About Joint Industry Committees Television ratings systems globally, fall across a wide spectrum from an almost totally independent for profit suppliers to a fully controlled industry system. There has been wide spread debate in terms of effectiveness of one particular system versus the other and the jury is still out if the JIC's are more effective in representing the requirements of research users than Owned Systems. (Definitions: Refer Oxygen May 2006).
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The results of the ARF survey included views expressed by media buyers and sellers that they have entered the age of client accountability, which is driving an inescapable need for improvements in audience measurement. It was also expressed that competition is the fundamental element that can spur these improvements and participants called for exploration of ways to open the market. |
Moral Hazard
Diary based television ratings were introduced in India in 1987. This was about the same time that overnight ratings were already being conducted in western Europe. ORG Marg with its Dutch partner VNU started operations in 1985 with a seven city panel. Their only funding was based on fees from subscribers whereas the JIB backed IMRB and A C Nielsen (MARS) took two years after 1995 to get the contract and one more year to implement it with ratings being finally available in 1998.
Finally the merger of the two rating services happened (October 2001) due to acquisition of AC Nielsen by VNU, which incidentally also held stake in ORG MARG. (refer: Related Links).
The legacy system thus created, had an inbuilt moral hazard. A media buying company's stake in a rating agency has an unavoidable problem of moral hazard. With a vested interest in the ratings company, the media buying company has an incentive to buy the ratings data from its own agency even when better data from other sources is available. This leaves principal clients' (advertisers') interest vulnerable to a perverse incentive that exists for the media buyer.
After the break
The next issue of Oxygen will talk about the importance of second by second ratings for various components of communications industry.
Please feel free to send your comments on feedback@audiencemap.com and we can assure you that we will try and respond to all your information requirements through this periodical.
Periodicity
This periodical is mailed to its subscribers on the first working day of every month. If you have received this as a forward, write to oxygen@audiencemap.com for your own copy.
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